Here’s How to Go Public Without Wall Street

April 18, 2018

Medical-robotics maker Myomo Inc. is taking a shortcut to go public. If it is successful, other small businesses could follow, perking up a dormant corner of the U.S. IPO market.

Initial public offerings by small companies have dwindled since the dot-com bust. Last year, 18 companies completed IPOs that raised less than $50 million, according to Dealogic. In 1996, 557 companies did.

Myomo is selling shares by using rules that grew out of a federal law designed to make IPOs quicker and less costly for small firms. The rules also aim to encourage more small firms to debut in the stock market without exposing investors to too much risk posed by some young, untested companies.

Proponents of the new rules, known as Regulation A+, appear to be “willing to risk a little more fraud if the dollar risk is less,” said David Feldman, an attorney who has championed the rule and is providing legal guidance for several offerings.

Myomo is the first Reg A+ offering poised for a major U.S. exchange, the New York Stock Exchange. The company is in the process of trying to sell two million shares at $7.50 apiece, after which it is tentatively approved to list on the NYSE MKT exchange.

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